Fed jolts the market, EURUSD tumbles down.
“Fed latest announcement fails to exceed market expectations.”
Federal Reserve raised interest rates by 75 basis points on yesterday, a move last seen since November 1994. The announcement was made after US Consumer Price Index rose 8.6% for the year in May, well above market consensus. During press conference, Fed Chair Jerome Powell emphasized that they are facing challenging period ahead to control rising inflation. In view of that, he calls for faster pace of hiking borrowing costs, in hope to bring price pressures under control. However, Fed projected that US may experience slowing economy and unemployment may rise in the months to come.
Quick recap on NZDUSD
The pair continues test around prior strong support near 0.6225.
NZDUSD Weekly Technical Analysis
From weekly perspective, NZDUSD extended its losses from mid-level of descending channel.
NZDUSD Daily Technical Analysis
In terms of daily perspective, the pair is skewed towards the downside when referring to recent price action and MACD. However, a close below 0.6225 and bottom level of descending channel is required to obtain further confirmation.
ORDER: SELL STOP
STOP LOSS: 0.6240
Target 1: 0.6100
Target 2: 0.6040
ZFX Analyst’s Comment
We expect the pair to extend its weakness for the mid to long-term ahead as Fed’s policy continues to diverge from other major central banks. However, a confirmatory close below 0.6225 is required before entering the market.
Risk Warning: The above content is for reference only, and does not represent ZFX’s position. ZFX does not assume any form of loss caused by any trading operations carried out in accordance with this article. Please be firm in your thinking and do the corresponding risk control.
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